The energy crisis in Europe, including gas rationing, was prevented in the short term due to an abundance of LNG and mild weather.
Reduced EU Gas Demand Due to High Prices
High gas prices in the EU resulted in a 10% drop in demand in 2022, with a further decrease expected in 2023, bringing the total decline to 15%. The impact of price-driven demand erosion varies by country. LNG remains a crucial alternative source to replace reduced Russian pipeline flows, with zero Russian gas expected to flow to the EU from 2023.
Tight Global LNG Market, High Prices for Europe
Global LNG markets will remain tight in 2023 due to increased demand from China, but Fitch believes Europe will have access to enough LNG, though at prices reflecting competition with Asian buyers. European gas prices are expected to remain volatile and high compared to pre-war levels and normalize only from 2025, with the